The Jonathan Clements Getting Going on Savings Initiative

As many of you know, in 2024, financial columnist Jonathan Clements was diagnosed with terminal cancer. At the time, a friend reached out to him to ask about naming a journalism award in his name. Jonathan declined. “The world has enough journalism awards already,” Jonathan said.

Instead, Jonathan proposed a different idea. If people wanted to do something in his name, what about a program that directly helps young people get started saving and investing? What about a program that opens Roth IRA accounts for young people from lower-income backgrounds, and provides an initial contribution to help the person get going and remove the inertia that keeps many people from beginning to save as early as they should?

A group of us from the Bogle Center (Bill Bernstein, Christine Benz, Karen Damato, and myself) together with Allan Roth and Jason Zweig have been working hard on Jonathan’s idea since last July.

Our little team of volunteers quickly recognized that we don’t have the capacity to actually run a program like this. We’d need to find a pool of grant recipients who are age 18+ (otherwise the Roth IRAs would have to be custodial accounts, which complicates things), who are ideally from low-income backgrounds, and who have earned income (so that they’re eligible to contribute to a Roth IRA). How would we find those people? How would we choose among them? And how would we handle the job of helping each of those people set up an account, fund the account, and so on? Clearly, we needed help.

So we set out to look for partner organizations that could handle the implementation side of things. But it was also critical to us that any organization we partner with must not be one that comes with big conflicts of interest (no banks or insurance companies, for example).

Another wrinkle: if you help a young person open a Roth IRA and give them some money to fund it, and then you stop there, what’s the likelihood that they’ll actually make a smart investment decision? Surely there needs to be some educational component as well. But if you look at most existing programs that teach young people about investing, there’s reason to be skeptical. For instance, the most famous such program — The Stock Market Game,  funded by a bunch of banks and brokerage firms — basically teaches students to day-trade stocks. Not great. (Again, as a group, we’re very sensitive to conflicts of interest.)

In addition, it was important to Jonathan that the educational materials be succinct, so that grants to program participants should feel like a windfall, to help get the person excited about participating, rather than just feeling like appropriate compensation for sitting through many hours of dry educational lectures.

So, with those goals and challenges in mind, here’s what we came up with.

We ended up partnering with two organizations: J-PAL North America (a research center based at MIT) and the city of Boston’s Office of Youth Employment and Opportunity.

Teaming with J-PAL will allow for the program to be set up as a randomized controlled trial, so that we can actually learn how effective a program like this is.

The Boston Office of Youth Employment and Opportunity performs the “on the ground” role: identifying potential participants, helping them open and fund the accounts, etc.

The new initiative is known as the Jonathan Clements Getting Going on Savings Initiative (named after Jonathan’s long-running WSJ column Getting Going), and it will work as follows:

• Program participants will be young adults aged 18-24 who participate in the City of Boston’s Summer Youth Employment Program. (The SYEP program targets underserved communities and places qualifying youth in jobs with a local government agency, community organization, or business for a few weeks over the summer.)
• Program participants will receive assistance opening a Roth IRA, and they’ll receive a $1,000 grant to fund the account.
• And participants will be provided with Bogle Center-crafted educational materials explaining what a Roth IRA is, how it works, why it’s a good choice for long-term savings (and why they should continue to make contributions over time) as well as information explaining and recommending a prudent investment option (in this case, specifically, a Vanguard Target Retirement fund).

The idea here is that the program would be reaching people at exactly the right time: at an age when they’re still young (18-24) but not too young to actually use the information. That is, by virtue of the fact that the participants are in the Boston Summer Youth Employment Program, we know that they have earned income (which is necessary to qualify to contribute to a Roth and which tells us that they have some cash flow of their own that might be used to contribute further).

And by getting the Roth IRA open and funded, we remove one major hurdle: inertia.

Get the account open. Get it started with an initial contribution that isn’t massive but should still feel meaningful and motivational to somebody at that age. And provide the participant with educational materials at (ideally) just the right time in their lives. That’s the idea, in a nutshell.

Can we promise that this idea will work?

We cannot. But we’d be honored and deeply appreciative if you’d help us find out.

If you’re interested in donating to the cause, you can do so via the Bogle Center’s donation page.

You can also find more information about the Jonathan Clements Getting Going on Savings Initiative on the Bogle Center website.

You can find more details about the study design on the Poverty Action Lab website.

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